Quarterly server shipments hit five-year low

A contracting market has led to plunging server sales

Worldwide server sales fell by 26.5 per cent in the first quarter, according to the latest figures from IDC, resulting in the lowest quarterly server shipment total in five years.

The analyst firm said that a contracting market had led to the largest quarter-on-quarter fall in server shipments since it began studying the market 12 years ago.

IDC splits the server market into three areas. Volume systems suffered the most, falling by just over 30 per cent year over year, while mid-range enterprise shipments fell by 13.6 per cent, and the high-end market by 19.5 per cent.

However, although this was the second quarter in a row that has seen falls across the board, IDC expects the market to pick up next year.

"Market conditions worsened in all geographic regions during the first quarter, as customers of all types pulled back on new strategic IT projects and ongoing infrastructure refresh initiatives," said Matt Eastwood, group vice president of enterprise platforms at IDC.

"Most enterprise organisations are deferring new IT procurements, and instead focusing on extending server lifecycles and improving existing asset utilisation. IDC believes that, while these strategies are effective in the near term, server demand will begin to improve in the second half of the year, as customers begin to rebuild their IT capabilities in advance of a meaningful economic recovery in 2010."

HP and IBM claimed joint first place in terms of shipments with 29 per cent each. However, while HP fell slightly to share the number one spot, IBM actually grew its System z and System p server business over the quarter.

Sun Microsystems and Dell finished the quarter in a statistical tie for the number three position.